9.
Order Fulfillment in e-Services <ul><li>Goals of customer care applications are simple </li></ul><ul><ul><li>What do online shoppers want? (BCG) </li></ul></ul><ul><ul><ul><li>Free delivery – 95% </li></ul></ul></ul><ul><ul><ul><li>Free returns if I am unhappy with product – 91% </li></ul></ul></ul><ul><ul><ul><li>Guaranteed delivery time – 75% </li></ul></ul></ul><ul><ul><ul><li>Quicker delivery – 69% </li></ul></ul></ul><ul><ul><ul><li>Site has a store located near me – 46% </li></ul></ul></ul><ul><ul><li>“ Proper fulfillment is whatever serves the customer best while preserving adequate profit margins to continue in business at a high level of customer satisfaction” </li></ul></ul>

10.
Order Fulfillment in e-Services <ul><li>Designing and implementing customer care applications can be another matter </li></ul><ul><ul><li>Central problems </li></ul></ul><ul><ul><ul><li>Enterprise information and customer information must be integrated into a unified whole </li></ul></ul></ul><ul><ul><ul><li>New kinds of customer behavioral information must be captured and processed </li></ul></ul></ul><ul><ul><ul><li>Customers and employees must share a common knowledge base </li></ul></ul></ul><ul><ul><li>All organizational functions must have access to a consistent picture of the customer relationship </li></ul></ul>

12.
Order Fulfillment in e-Services <ul><li>Fulfillment Recommendations ( e-Service , Chap. 8) </li></ul><ul><ul><li>Build an order confirmation system into your service process to ease customer worries </li></ul></ul><ul><ul><li>Grant customers online access to production order process and shipping data </li></ul></ul><ul><ul><li>Build (or outsource) warehouse, fulfillment, and product delivery chains that create as much customer contentment on the back end of your service process as on the front end </li></ul></ul><ul><ul><li>Focus on fast, efficient fulfillment </li></ul></ul><ul><ul><li>Shipping charges … </li></ul></ul><ul><ul><ul><li>Probably don’t want to make them free </li></ul></ul></ul><ul><ul><ul><li>Perhaps free for … </li></ul></ul></ul><ul><ul><ul><ul><li>Large purchase size above some dollar amount </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Loyal, high-value customers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>In-store pickup </li></ul></ul></ul></ul>

15.
Order Fulfillment in e-Services <ul><li>Fulfillment Outsourcing </li></ul><ul><ul><li>Potential benefits </li></ul></ul><ul><ul><ul><li>Speed to market </li></ul></ul></ul><ul><ul><ul><ul><li>Deploy e-Service quickly </li></ul></ul></ul></ul><ul><ul><ul><ul><li>No capital investment in fulfillment </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Level of service provided by outsourcer may be better than a start-up’s fulfillment service </li></ul></ul></ul></ul><ul><ul><ul><li>Scalability </li></ul></ul></ul><ul><ul><ul><ul><li>Higher when using an large fulfillment service </li></ul></ul></ul></ul><ul><ul><ul><li>Focus </li></ul></ul></ul><ul><ul><ul><ul><li>On business competencies, not on shipping </li></ul></ul></ul></ul><ul><ul><ul><li>Lower costs </li></ul></ul></ul><ul><ul><ul><ul><li>No need to hire shipping staff </li></ul></ul></ul></ul><ul><ul><ul><li>Focus on the customer </li></ul></ul></ul><ul><ul><ul><li>Capitalize on efficiencies </li></ul></ul></ul>

22.
Supply Chain Components Components of a Supply Chain? <ul><li>Supply chain is a “network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer.” (Christopher, 1998) </li></ul><ul><li>Supply chain components </li></ul><ul><ul><li>Two or more legally separated organizations </li></ul></ul><ul><ul><li>Material, information, and financial flows </li></ul></ul><ul><ul><li>Firms producing objects </li></ul></ul><ul><ul><li>Logistics service providers </li></ul></ul><ul><ul><li>Ultimate customer </li></ul></ul>

26.
Supply Chain Problems Historical Inventory Management <ul><li>Inventories </li></ul><ul><ul><li>Independent demand </li></ul></ul><ul><ul><ul><li>Multiple Period Demands </li></ul></ul></ul><ul><ul><ul><ul><li>Assume demand pattern. Forecast when you will stock out. At the appropriate time, order some order quantity (or up to some quantity), so that with the amount you receive at a future date -- plus the buffer inventory (“safety stock”) -- you will have a small probability of stocking out </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Single Period Demand -- “paperboy problem”; “fashion goods” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Order to balance costs of “overage” against costs of “underage” -- giving maximum profit </li></ul></ul></ul></ul><ul><ul><ul><li>A/B/C -- some inventories more important or costly than others </li></ul></ul></ul><ul><ul><ul><ul><li>Monitor costly inventories closely </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Don’t monitor cheap inventories, just hold lots of buffer stock </li></ul></ul></ul></ul><ul><ul><li>Dependent demands </li></ul></ul><ul><ul><ul><li>MRP/MRP II </li></ul></ul></ul><ul><ul><ul><li>ERP/Extended ERP </li></ul></ul></ul>

28.
Supply Chain Problems What “The Experts” Now Suggest <ul><li>Rocket Science Retailing (Fisher et al., HBR, July/Aug 2000) </li></ul><ul><ul><li>Retailer objective: “right product, right place, right time, right price” </li></ul></ul><ul><ul><li>Historically, the opposite has happened </li></ul></ul><ul><ul><ul><li>most inventory planning is for long life-cycle products </li></ul></ul></ul><ul><ul><ul><li>online and offline stockouts </li></ul></ul></ul><ul><ul><ul><li>increasing markdowns </li></ul></ul></ul><ul><ul><ul><li>supply chain lead times often are so long, that forecasts of demand only confirm that the product will tank, and nothing can be done about it </li></ul></ul></ul><ul><ul><li>Rocket Science Retailing </li></ul></ul><ul><ul><ul><li>“ create a high-tech forecasting system supported by a flexible supply chain” </li></ul></ul></ul>

37.
Supply Chains Conceptual Frameworks <ul><li>Clockspeed (Charles Fine, MIT) </li></ul><ul><ul><li>“ The ultimate core competency of an organization is “supply chain design,” which I define as choosing what capabilities along the value chain to invest in and develop internally, and which to allocate for development by suppliers.” </li></ul></ul><ul><ul><li>“ Fast-clockspeed” supply chain characteristics </li></ul></ul><ul><ul><ul><ul><li>rapidly evolving world </li></ul></ul></ul></ul><ul><ul><ul><ul><li>designing and redesigning firm’s chain of capabilities </li></ul></ul></ul></ul><ul><ul><ul><ul><li>objective is a series of competitive advantages -- often quite temporary </li></ul></ul></ul></ul>

61.
Supply Chain e-Services Technology <ul><li>SCM Technologies </li></ul><ul><ul><li>J2EE Technologies </li></ul></ul><ul><ul><ul><li>SAP re-tooled all of its applications to support the J2EE protocol, in addition to its own ABAP technology standards </li></ul></ul></ul><ul><ul><ul><li>Many examples of using Java for enhanced SCM </li></ul></ul></ul><ul><ul><li>.NET Technology </li></ul></ul><ul><ul><ul><li>Doesn’t support multiple platforms, which will be difficult for integration of supply chain </li></ul></ul></ul><ul><ul><ul><li>Supply chain vendors have been trying to convince Microsoft to support J2EE, so they could easily integrate enterprise SCM to the desktop, but Microsoft has refused </li></ul></ul></ul>

62.
Supply Chain e-Services Technology <ul><li>SCM Technologies </li></ul><ul><ul><li>OpenAdaptor.org </li></ul></ul><ul><ul><ul><li>open source supply chain integration system, made open-source on 1/30/2001 </li></ul></ul></ul><ul><ul><ul><li>originally developed for financial services </li></ul></ul></ul><ul><ul><ul><li>developed by investment bank Dresdner Kleinwort Wasserstein (DrKW) </li></ul></ul></ul><ul><ul><ul><li>already used in global integration 40 projects by DrKW </li></ul></ul></ul><ul><ul><ul><li>“ allows the rapid, simple and often code-free integration of any system to any other system, enabling the complete supply chain, plus internal systems, to be integrated while allowing access to the web” </li></ul></ul></ul>